WHY FREE ELECTRICITY ISN’T
Never pay to charge your EV? If it sounds too good to be true....
You know the feeling. You need a new printer and get what looks like a bargain at £49.95. A few weeks later the ink dribbles its last, so you go to order a new set of cartridges. Huh? Thirty-fve quid? This doesn’t mean you’ve just bought a £14.95 printer. It means they sell you the printer at a subsidy as a way to hook you into the proftable inks. Same with your new phone. Take it out of the shop on a £20 monthly contract, a couple of months later drop it down the lavatory, and you’re left having to buy a new phone for £300-plus, while still, for the next 22 months, paying for the drowned one on the knock. They were using very proftable airtime to subsidise your hardware.
If the deal is unusual, it’s worth acquainting yourself with the vendor’s business model. And there sure are some unusual deals on electric cars.
Tesla’s ofer is the most striking: free electricity on a Model S. Imagine free petrol on a BMW M5. See, I said that’d get your attention. But it’s true. Buy any Model S except the base-spec one, and you can bowl up, ad lib and in perpetuity, at one of the company’s network of ‘Superchargers’ and fll your battery in little over half an hour for nothing.
Of course, in the interests of understanding the extent of Tesla’s beneficence, we should note that it’s far cheaper to give away energy in the form of electricity than as petrol. In Britain, pay £1.05 for electricity and that’s £1 for the energy plus 5p of VAT. But buy £1.05 of petrol and it’s about 30p in actual fuel, 58p of duty (a tax) and 17p of VAT (another tax).
But whatever the fiscal niceties, free driving sounds like a good wheeze. And yet few Tesla drivers, it turns out, actually take up the ofer. Most of them charge at home on their own bill, because it’s convenient. The Supercharger network is a sales technique for the cars, a means to overcome one of the most signifcant objections in potential buyers’ minds: range anxiety. Just as the Chevy Volt overcame it by including a petrol engine under the bonnet, Tesla says you can go as far as you like in your Model S because you can grab a dose of high-amperage replenishment en route.
When it launched the Zoe, Renault figured that there was another hurdle in buyers’ minds: the fear of the battery prematurely losing capacity. So Renault owns the battery, undertaking to replace it free should it break. But of course you still do pay, in the form of a mileage-dependent monthly fee to lease the battery. This scheme also has the efect of lowering the up-front sticker price of the car… because you aren’t getting the whole car. But such fnancial engineering doesn’t suit feet buyers, so now Renault is also ofering the Zoe battery-included too. SIM-free versus contract, if you will.
Of course, helping the business case for all EV manufacturers is the £5,000 government subsidy. But Audi figures even this isn’t enough. To help sell the A3 e-Tron, they add an extra bung of their own. Marketing boss Luca de Meo told me: “We subsidise the A3 e-Tron to give something the customer can aford. That builds volume which eventually reduces the cost.” So why get into this whole business at all? He agrees not enough people really want these cars. “We’re doing it to meet CO2 legislation. We have to do e-Tron in volume to get our CO2 average down. The reality is with the low fuel price at the moment, people want big SUVs.” Now that really does sound like a deal. Any subsidy on your phone or printer inevitably exacts its price from you at some future point. This one lets you of scot-free, at the expense of the Q7 buyers and the wider tax-paying public.
“Free driving sounds like a good wheeze, yet few take up the ofer”